This paper provides an extensive literature review of postpsychotic PTSD reactions as well as a brief discussion of the relationships between psychosis, trauma, and PTSD. The empirical research suggests that involuntary vs. voluntary hospitalization status, number of hospitalizations, age, gender, and severity of psychosis have no relationship to postpsychotic PTSD and that there is no relationship between PTSD symptomatology and negative symptoms of schizophrenia. However, five of the six empirical studies conducted have reported that between 35 and 67% of their samples meet criteria for PTSD due to psychosis and/or hospitalization, suggesting that the experience of psychosis and/or hospitalization may lead to PTSD-type symptoms. Recent studies also suggest that overall distress caused by psychosis and/or hospitalization is a major factor in developing postpsychotic PTSD. Several treatment strategies for postpsychotic PTSD are discussed along with proposed treatment implications from the empirical literature. Directions for future research are also discussed.